Credit Rating and its types :

Previously we discussed about Credit Report in detail, now we can discuss about Credit Rating and its types. Credit rating ascertains the financial trust worthiness of an individual, firm, or government. Credit rating is an opinion that is expressed by Credit rating organization relating to future debt repayments by borrowers. It helps investor to assess the risk level by comparing the offered rate of return with his expected rate of return. The different types of credit ratings are :

1. 
   

   
   Long term rating

   
   


2. 
   

   
   Short term rating

   
   


3. 
   

   
   Long term senior debt rating & Short term senior debt rating

   
   


4. 
   

   
   Servicer rating

   
   


5. 
   

   
   Fund credit rating

   
   

Long term Rating :

Ratings are also called as gradings. Long term ratings enable comparisons to be made of obligors capacity to honor the financial commitments for more than one year as contracted. The different types of long term gradings are:

A : High level of capacity to honor the financial commitment on the obligation

AA : A Very high level of capacity to honor the financial commitment on the obligation

AAA : Highest level of capacity of the obligor to honor its financial commitment on the obligation 

B : Low level of capacity to honor the financial commitment on the obligation

BB : This level of capacity to honor the financial commitment on the obligation may not be considered as problematic in present, but this should not continue in future

BBB : This level of capacity is likely to diminish in future

C : Very high default risk

CC : High default risk

CCC : Possibility of default risk

* A (+) plus or (-) minus symbol may be added to the rating symbols to indicate the relative standing of rating categories.

Stay tuned to our Blog to know more about the remaining types of credit ratings in detail in our next posts.

After Getting A Free Credit Report Some Struggle To Overcome Old Debts In Bad Credit Repair Process

Many consumers often begin the process of improving their bad credit score through acquiring a free credit report as many men and women often take advantage of an annual credit report available to them, specifically for the purposes of reviewing one’s financial history, credit standing, and where areas of debt may still need to be addressed. Obviously, not all consumers are finding their credit history is in good standing, but there are further issues that many consumers have faced when it comes to long-term unemployment and financial difficulties that may have led to write offs on their report, mistakes that may have been made, or obviously many consumers who are working to overcome multiple missed payments or delinquent debts. Read more at Red, White, & Blue Press.

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